Contractor racks up failed projects but carries on

For Duncan G. Leith of Holden, hearing about Sutton's battle with TLT Construction Corp. over its $42 million middle/high school building project was a school construction nightmare redux.

The former Wachusett Regional School District Committee chairman had gone through similar turmoil a decade ago, after Wakefield-based TLT Construction had been awarded a contract for additions and renovations to Wachusett Regional High School in 2004. That contract started at $51.6 million but ballooned with $11 million in cost overruns and nearly half a million in legal fees.

The renovated school opened in 2008, two years behind schedule.

In December 2008, after mediation, the school district settled with TLT to complete the project for $6.2 million.

In Sutton, selectmen placed a claim on TLT's performance bond last September and terminated TLT's contract in October. Brait Builders Corp. of Marshfield was brought in this spring to complete the project, which is expected to be ready by April 2015, nearly a year late.

TLT has sued the town for wrongful termination and related claims.

The same scenario also played out at Norfolk County Agricultural High School in Walpole and elsewhere: Contracts were awarded to TLT, the lowest eligible bidder, which ultimately didn't deliver. But legal maneuvering by TLT hid its controversial past from bid submissions.

TLT representatives could not be reached for comment on this story. Voice mailboxes at the company were full, and an email did not receive a response.

Local officials want to know how this contract-award fiasco can continue to happen and what can be done to prevent it from happening again.

"When I hear about other towns, I say, 'You're kidding me.' I can't believe they (TLT) are still getting contracts," Mr. Leith said in an interview. "I can't figure out how they can keep going."

Town volunteers who are involved in capital projects say they're hamstrung by public construction laws that require them to select the lowest eligible and responsible bidder.

While determining the lowest bidder is a matter of comparing listed costs, and eligibility should be a simple check of whether the contractor meets minimum state standards, some question whether state certification is enough to weed out the bad actors.

The standard becomes even murkier for "responsible" bidder, hinging on legal interpretations of fraud, reportable litigation and under what terms a contractor must report terminated contracts.

In TLT's bid submission to Sutton in 2011, it reported that none of the general contracts it had in the previous five years was terminated by the awarding authority before completion, despite several heated but mediated partings of way, including with Wachusett.

Contractors often negotiate the definition of termination in settlements, too, and the awarding authority agrees, to get the project completed.

When New Hampshire's Department of Administrative Services severed ties with TLT last October from work on a National Guard training facility in Pembroke and prohibited TLT from bidding in New Hampshire for one year, the settlement stated that it was a "termination for convenience" and could not be characterized as any sort of decertification or termination for cause.

Similarly, in a response to a bid protest with Sutton from Bacon Construction Co., which claimed TLT did not list all current or recent litigation, TLT's lawyers said that it did not have to report voluntarily settled disputes.

"They know the legal loopholes and how to work with it," Mohammed Khan, administrator for the Montachusett Regional Transit Authority, said after MART terminated TLT's contract this spring for a commuter parking garage in Leominster. "The state should be stepping forward with these people. They're obviously in the business of making money by not doing things."

"With someone with such a checkered past, how does the state allow someone like TLT to keep its certification and get contracts? To me, it's ludicrous," said former Sutton Selectman Richard Hersom. "We're not construction experts. There are some really intelligent, good people on the (School Building) committee... but it's a volunteer position. They're entrusted with overseeing a nearly $60 million project. It doesn't make sense to me."

Legislation introduced in the last two sessions by state Sen. Michael O. Moore, D-Millbury, would tighten the definition of fraud in state public construction bid laws. The bill passed the Senate both times but its companion bill this session, H. 2805, introduced by Rep. Ann-Margaret Ferrante, D-Gloucester, is still in the House Ways and Means Committee.

The bill would generally define fraud as something intended to mislead the average person. Mr. Moore said he filed it in response to a 2010 state Supreme Judicial Court decision, which ruled that to be considered fraud, a misleading statement had to actually be the deciding factor in a contract award.

"A lot of my concern is that any awarded contractor isn't going to misrepresent what they do," Mr. Moore said. "I'm actually kind of surprised it hasn't moved. This could get done in informal session (after July 31) if no one objects to it. I think it's a very simple solution to a big problem."

State Rep. Ryan C. Fattman, R-Webster, said he was working with Rep. George N. Peterson Jr., R-Grafton, and Rep. Kimberly N. Ferguson, R-Holden, to get the bill passed this year.

"It takes in a large swath of political interests. It's not really perceived to be controversial," Mr. Fattman said.

State regulators have been a watchdog for repeatedly bad practices, to a certain extent. Contractors who want to do business with government entities must file annually for certification from the state Division of Capital Asset Management and Maintenance. Contractors can't bid for public projects without a DCAMM certificate of eligibility and must provide updated information with each bid they submit.

As part of the certification process, regulators look at project-evaluation forms submitted by awarding authorities. A minimum score of 80 out of 100 is considered passing.

Regulators at DCAMM decertified TLT in August 2008 for 18 months, for repeatedly providing misleading and ambiguous information in bids for public construction projects.

When TLT regained its eligibility after its decertification expired in February 2010, it won a number of high-profile contracts funded by taxpayers, including projects in Sutton, Leominster, Walpole and Groton.

Those contracts were terminated in the past year because of delays, nonpayment of subcontractors, faulty materials and other charges. The terminations and disputes leading up to them have brought a slew of lawsuits, just like in the mid-2000s.

DCAMM again decertified TLT on July 11, 2013, for one year, based in part on Sutton's experience. The agency said TLT willfully misled contract awarding authorities about claims made by subcontractors who weren't getting paid and the company received several failing scores on project evaluations, including preliminary evaluations for ongoing projects in Foxboro, Lexington, Sutton and Westwood.

TLT has not reapplied for certification since its decertification expired two weeks ago, according to Meghan M. Kelly, deputy communications director for the state Executive Office of Administration and Finance, which oversees DCAMM.

State Sen. Richard T. Moore, D-Uxbridge, said he talked to regulators about raising hard questions if TLT or similar contractors with significant histories of problems reapply for certification.

Brian C. O'Donnell, director of labor relations for the trade association Associated General Contractors of Massachusetts and a former assistant attorney general and deputy general counsel at the state Office of the Inspector General, said cities and towns still needed to do their own checking of bidders, even through a Google search of newspaper articles.

"There is a gap between what towns will tell you about a project and what they report to DCAMM," he said. "DCAMM certification doesn't guarantee you anything."

Although cities and towns often fear lawsuits for investigating or rejecting a lowest bidder, the courts have upheld their right to go beyond what's in the DCAMM files, he said.

One of those cases was a 2007 federal appeals court case involving Northboro's decision to not award its $7.7 million library expansion contract to Barr, Inc., the lowest bidder.

But a frank reference may not be enough to influence a regulator's or building committee's decision.

Mr. Leith said, "We did not give good recommendations to other people who called, but they still got on the DCAMM (eligibility) list."

Wendy M. Mead, chairwoman of Sutton's School Building Committee and a lawyer, said, "We had concerns about TLT from the beginning."

After much discussion and a bid protest from the second-lowest bidder, Bacon Construction, the committee decided it wasn't worth the risk of lawsuits and delays to not select TLT.

"The problem was, they technically weren't involved in litigation (against them) so we couldn't exclude them," she said, referring to TLT's omission of settled cases in its bid.

"I have to reluctantly give them credit for being creative. I think they certainly know what they're doing," she said.

Suzanne Green, superintendent-director of Norfolk County Agricultural High School, said schools in particular were harmed when contractors didn't perform as promised.

The school terminated its $22 million three-phase contract with TLT in December after TLT abandoned the project. The project is expected to be completed this summer by another contractor, Brait Builders, months after TLT committed to having it done.

"Public funds are not easy to come by," Ms. Green said. "Schools especially are on such a tight timeline. By prolonging it, it just creates unrest. It's a very unsettling thing."

Contact Susan Spencer at susan.spencer@telegram.com. Follow her on Twitter @SusanSpencerTG.